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Open Innovation

Dr John Stewart, Director of Open Innovation at Tate & Lyle, explains the importance of partnerships in an open innovation strategy for speeding up technology development.

Many hands make light work. Two heads are better than one. A problem shared is a problem halved. We all know that, with a little of help from our friends, we can lighten the load. You may have noticed a new trend in the world of food science. Perhaps you have noticed the ‘partnering forums’ at conferences with more food manufacturers publicising their ‘challenges and wants’; technology scouts are everywhere. A quick look on LinkedIn reveals the rise of the open innovation professional. Is this something new?

Open innovation - the concept
The term ‘Open Innovation’ was coined by Henry Chesbrough, a business school professor at the University of California, in his book of 2003 (1). Chesbrough states that ‘Open innovation is a paradigm that assumes that firms can and should use external ideas as well as internal ideas, and internal and external paths to market, as the firms look to advance their technology’. Although the term itself is new, most of the approaches involved certainly are not.

Partnering between organisations to develop technology is as old as the joint venture, the license agreement, and the patent itself. As far back as 1875, Tate & Lyle acquired rights to the technology that led to the sugar cube. Often I am asked what is new about open innovation - haven’t we always done this? The answer is yes and no. While many of the tools of open innovation are certainly not new, as the pressure on innovation to deliver has increased, so has the need to partner - and partner well.

Universities recognised this years ago with the emergence of the ‘Technology Transfer Office’. Those with experience of these offices will know they can have mixed fortunes, but the objective is straight forward: to enable an organisation generating technology it cannot commercialise to make use of this to support itself and survive in the face of on-going funding cuts. The answer is simple: by partnering with companies that need the technology and can commercialise this very well.

At the same time, although corporations have resources, these are obviously finite and under intense pressure to deliver a constant pipeline of high value innovation. As well as the internal R&D lab, a fast way to do this is to partner with external organisations, gain access to their technology and bypass years of development time. Some of the world’s largest food companies have embraced this concept with great success. There is a lot to be gained from matching the technology foundries of academia and start-ups with the development and commercialisation powerhouses of industry. This is certainly nothing new, but anyone involved with this process will know that successful stewardship is not always a given.

The tools of open innovation
Table 1: Some examples of open innovation approaches and the purposes they serveOpen innovation is a broadly-used term that describes a wide range of practices. From technology scouting, crowdsourcing, technologylicensing, research consortia, joint development projects, corporate venture capital to supplier challenge days - a host of approaches can be employed (See Table 1).

What these practices share is the objective of developing technologies and products originating outside the organisation. Despite the diversity of approaches, a vital requirement of any open innovation programme is to be clear about which tools to employ and master, which to experiment with and which to leave for another day. This choice will be driven entirely by the goals of a company’s innovation process. For example, if the goal is to increase the number of larger scale, longer term projects that address ‘holy grail’ challenges and entirely unmet needs, participation in research consortia is a valid approach. However, this would be a bad choice if the objective is to capture close to market, quick win opportunities. Likewise, corporate venturing can provide access to an external pool of technology and innovation not otherwise accessible to a company. But this approach is not so helpful to those companies just seeking ways to solve welldefined, discrete technical challenges. Therefore, the first step in any open innovation programme is to identify the priorities and unmet needs of the organisation, and carefully tailor the approach to match these. Not only will this dictate the tools used, but also the teams, skillsets and people required, as well as the external networks and experts needed.

By contrast, it is unwise to be lured by the open innovation buzzwords and dabble with new initiatives simply because they fall under the broad umbrella of this new concept. A poorly chosen set of open innovation approaches will lead to much frustration and failure in an organisation, regardless of how well they are executed. So choosing the
open innovation approach needs to be crystal clear.

At Tate & Lyle we use a combination of well-defined open innovation tools, each carefully designed to deliver on the wider needs of the business. Our Open Innovation team manages partnerships to develop and commercialise new specialty food ingredients, using a broad range of partnership structures (e.g. technology options and licensing, joint development agreements, etc). Our independent venture capital fund (Tate & Lyle Ventures) invests in early stage companies that look set for rapid growth, based on technologies in our areas of interest not just today, but also in years to come. The two teams work closely, but independently. This combination of approaches provides choice for external companies seeking different types of partnership with us.

The SODA-LO® Salt
Microspheres case study

Micrograph contrasting SODA-LO® salt microspheres (top) with standard salt crystals (bottom)At Tate & Lyle we have a long history of open innovation - from the sugar cube example mentioned above (1875) to the discovery of sucralose with Queen Elizabeth College, London (1976), external partnering has provided some of the most successful products in our history.

A more recent example is the partnership that led to our award-winning SODA-LO® Salt Microspheres ingredient. Tate & Lyle’s Innovation and Commercial Development team develops specialty food ingredients in three areas: sweeteners, texturants and wellness. Our Wellness team creates ingredients that provide nutritional benefits to food, for example, our PROMITOR® Dietary Fibers that add fibre and reduce fat, calories and sugars. Until quite recently, we did not have a solution to reducing sodium - a major health priority across the food industry worldwide. At the same time, Eminate Ltd, a subsidiary of Nottingham University (UK), had created a technology that enables up to 50% sodium reduction in a range of foods without losing the salt flavour or affecting taste. Eminate lacked the scale and relationships to fully develop the product and make it a commercial success worldwide.

So, the food industry had a major unmet need to which Tate & Lyle and Eminate each had part of the answer - the perfect breeding ground for an open innovation partnership. Late in 2011, Tate & Lyle and Eminate signed an exclusive, worldwide license agreement giving Tate & Lyle rights to further develop the SODA-LO® technology, scale up the product and launch it worldwide. Just over two years later, the product had won four major food ingredient innovation awards worldwide, was being incorporated across an increasing range of food products and was proving to be a valuable tool helping consumer acceptance of reduced sodium foods.

The SODA-LO® case study demonstrates several additional features of the open innovation approach. For example, the company behind the original invention (Eminate) was created as a subsidiary of Nottingham University, specifically as a way to commercialise technologies through partnering with industry - in itself a dedicated open innovation strategy. As part of Tate & Lyle’s go to market approach, SODA-LO® has been showcased at a number of food manufacturer supplier challenge days - events created with the aim of using open innovation to solve unmet needs.

Open innovation - the upshot
Although partnerships between academia, start-ups and corporates are nothing new, a much greater focus from industry on open innovation is a recent phenomenon. But it’s not just the tools that are new - it’s also the mind-set. The only way for innovation partnerships to be successful is if they benefit all the parties involved. Short term gains from one sided partnerships are quickly recognised as such and create a negative impact on an organisation’s ability to attract future partners. Selfish cooks spoil the broth, poison the well and muddy the waters. But successful partnerships that create mutual benefit provide a strong incentive for organisations to become more approachable and, ultimately, easier to work with. This leads to yet more successful partnerships that, in turn, attract more investment into a sector as a whole, as more corporates and a wider range of investors (both public and private) seek to recreate this formula.

But this doesn’t happen by osmosis. In the same way that you put in place dedicated teams to manage customer relations and recruitment, you need a dedicated team to find the best new partners and attract them to work with you. Prospective partners need to feel valued by your organisation. Given the fact that most innovation will always happen outside any single organisation, actively promoting and investing in open innovation is a winning strategy.

For more details on Tate & Lyle’s Open Innovation process, or to contact us with details of your innovation, visit our open innovation website at www.tateandlyleopeninnovation.com

Dr John Stewart, Director, Open Innovation, Tate & Lyle, 1 Kingsway London, WC2B 6AT
Tel: +44 (0) 207 257 2277 Email: john.stewart@tateandlyle.com
Web: www.tateandlyleopeninnovation.com

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